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Number Crunching UBB Bandwidth

When the Internet was first opened up to consumers, Canadians we had to pay Internet Service Providers (ISP’s) usage fees in order to connect. We paid by the minute.

Using the internet could be quite expensive that way. So many Canadians did not.

When Bell and Rogers entered the ISP market, they offered Unlimited packages for a flat rate. This was much much more economical for consumers. This is one very important reason why such a high proportion of Canadians went online. Which has unquestionably been very good for Canada’s digital economy.

This caused two huge changes.

All the Independent ISPs went out of business (or switched to doing something else).

Canadians logged on. Knowing what the Internet would cost per month made it more accessible.

So what’s the problem?

Once all meaningful competition was gone, even the Canadian Government was able to see that no meaningful competition was a bad deal for consumers.

Now that they shared the market, the phone and cable ISPs rejigged their services, and stopped offering “unlimited” packages. And they introduced “caps.” Prices went from being some of the lowest in the word to being some of the highest. In the few major markets where consumers had the option of choosing between Phone based Internet or Cable based Internet, it seems after a while that the two took turns being the higher priced. Adding insult to injury if you decide to cancel your service you get kit with cancellation fees. My guess is that it averages out over the year.

I don’t know if Bell suspends service when their customers hit their “cap” but I have been told that Rogers does this. By university students.

Being overcharged is bad, but being cut off is unacceptable. Because the Internet is a necessity of life. And I would think that is more true for a University student than anyone else.

So the Canadian Government mandated competition.

The new Independent ISPs offered unlimited packages. When I switched to TekSavvy I opted to pay a little less for a capped amount of 200GB per month. But my Indie ISP doesn’t cut me off even if I go over a little. They average it over two months, so the next month is likely to be under. I have yet to be hit with an overage charge. So 200GB seems to be a reasonable monthly bandwidth allowance. But that is much higher than the caps Bell is imposing.

One of the biggest problems with the introduction of this type of Usage Based Billing is that consumers can’t see it or measure it ourselves. We don’t understand it. Back when Canadians rejected Minute based UBB at least we understood how much a minute was, so we could understand how much we were being charged.

This is why the knee jerk response– particularly after getting clobbered by an overage bill or two– will be for Canadians to severely curtail our online activity.

As far as we know at this point, we will continue to pay what we pay now, and UBB will be added on in addition to that.

It is unclear how it will be assessed. It could be charged to all use, both below and above the cap. The assumption is that it will only be applied to above the cap amounts.

I think this assumption is being made because Bell currently charges overages above the cap on their own customers according to a usage based billing structure. But there is no way of knowing if UBB will be assessed on non-Bell customers the same way.

The only thing that I am absolutely certain of is that usage under the cap will not be discounted.